INTERNATIONAL. The first Barclays UK Prosperity Map has revealed that booming house prices and returns in equity markets, in addition to higher wages and employment rates have resulted in every UK region becoming more affluent, and has driven a 41% increase in numbers of millionaires since 2010.
Longer-term, growth in millionaires is expected to return to more normal levels, with a 9% increase in the UK expected by 2025, in-line with GDP growth.
The research uses factors including numbers of millionaires, average annual pay, the percentage of households giving to charity, business survival rates and exam scores to generate a unique ‘Prosperity Index Score’ for each UK region.
These factors provide a deeper view of regional financial health than single measures of wealth such as assets, investments and the location of luxury services and make it possible to predict the UK’s next most prosperous areas.
Akshaya Bhargava, CEO, Barclays Wealth and Investment Management, said: “The results of the Barclays UK Prosperity Map give us reason for optimism. The UK is becoming more prosperous, with every region having grown in affluence since 2010. It is also encouraging to see that regions and cities are starting to close the gap with London in terms of prosperity; with the North East, for example, seeing business survival rates behind only London. We need to collectively support entrepreneurship and educational attainment in regions outside of London and the South East so that they continue to grow and prosper.”
As the UK’s economic powerhouse, London and the surrounding South East are still the most prosperous areas of the UK. The increase in the capital’s house prices has contributed to the number of London millionaires growing by 48% in the past five years to 191,000 – more than the combined millionaire population of Wales, Scotland, Northern Ireland and Northern England. After London, Reading is the most prosperous city in the UK, with average earnings of £30,562 and a strong business birth-to-death ratio.
However, the research also reveals that the East of England is the third most prosperous region of the UK. Rising house prices, and an influx of wealthy individuals to the region as London’s centre of gravity has shifted east, has led to 93,000 more millionaires calling the region home. Prosperity has also been driven by strong levels of entrepreneurial activity, with Cambridge in particular emerging as a hub with over 25,000 business start-ups.
Northern regions on the cusp of change
Although the North East, Wales and Scotland have recorded higher than average unemployment and insolvency rates since 2010, the research suggests that Northern regions may be on the cusp of change, with the North East leading the way.
Although the North East currently registers low on the Prosperity Index, the region has grown faster than the national average in the past five years. The 50% rise in the number of millionaires living in the North East is the joint-largest increase of any region in the UK along with Wales. The North East is also the second strongest region in the UK for exam results, after Northern Ireland and has a thriving entrepreneurial scene, second only to London.
Paul Swinney, Senior Economic, Centre for Cities, said: “The Barclays UK Prosperity Map reveals that property price increases in the capital have helped to drive the exceptional 41% increase in numbers of UK millionaires and helped to boost the affluence of all UK regions. However, housing will also prove to be a challenge for those living in London.
“The research reveals that cities such as Reading and Cambridge are thriving entrepreneurial hubs. If property prices in the capital continue to rise then London’s future growth prospects could be hindered. London needs to quickly expand its availability of housing in order to maintain and secure its growth.”
The Barclays UK Prosperity Map has been compiled by Opinium and ranks UK regions and cities in terms of their affluence. A Prosperity Index score has been calculated by Opinium for each UK city and region, helping to explain the data on millionaire numbers calculated by Wealth-X. The index uses third party figures on the factors listed below:
As these factors all have different units of measurement, the data is indexed to give a consistent measure of the regions’ performance across the different attributes. An overall index for each region is then calculated by summing all the measures, and the index scores are given an appropriate negative or positive weighting.
The final step involves giving the scores a range of performance. This is calculated by summing all of the largest scores on each measure to give the highest score possible and then summing all of the lowest scores on each measure to give the lowest score possible.
The final index scores have a scale that runs from 0 to 1. If a region had the highest score across all factors, it would achieve an index score of 1; and equally, if a region scored the worst across all factors, it would achieve an index score of 0.
Data on the number of millionaires within each UK region, used alongside the Prosperity Index, has been calculated by Wealth-X and incorporates factors including spending, investment and asset valuations from both public and proprietary sources.
Barclays is an international financial services provider engaged in personal, corporate and investment banking, credit cards and wealth management with an extensive presence in Europe, the Americas, Africa and Asia. Barclays’ purpose is to help people achieve their ambitions – in the right way.
With 325 years of history and expertise in banking, Barclays operates in over 50 countries and employs over 130,000 people. Barclays moves, lends, invests and protects money for customers and clients worldwide.
For further information about Barclays please visit our website at www.barclays.com
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